MCD liable to pay compound interest at GPF rates for delayed pensionary benefits.

The applicant, Sh. Suresh Kumar, retired from service as a Mate (Supervisor) with the Municipal Corporation of Delhi (MCD) on superannuation on April 30, 2019

Although the Pension Payment Order (PPO) indicated a capitalized value of pension of Rs. 8,18,089/- and Death-cum-Retirement Gratuity (DCRG) of Rs. 7,68,768/-, these amounts were not released promptly to the applicant

Instead, the respondents illegally deducted Rs. 8,320/- from his pension monthly

The respondents, through a short affidavit filed on March 12, 2025, admitted to paying the capitalized value of pension on November 22, 2023, and the gratuity on August 23, 2024, acknowledging a considerable delay

The respondents attributed the delay to their unsound financial position

The applicant sought the release of the remaining 40% advance amount of pension and gratuity with 18% interest, refund of illegally deducted amounts with 18% interest, and cost of application

1. Whether the applicant is entitled to interest on the delayed payment of capitalized value of pension (commuted pension) and DCRG

The Tribunal applied the principle established in Rajbir Singh v. MCD and Ors., O.A. No. 2821/2023, decided on October 30, 2025, which held that employees whose retirement dues, such as gratuity, are not paid in a timely manner are entitled to interest at the applicable GPF rate, calculated on a compound basis

The Tribunal noted the respondents' admission of significant delay in paying the capitalized value of pension and DCRG to the applicant

Citing the Full Bench decision in Rajbir Singh (supra), the Tribunal emphasized that the issue of entitlement to interest for delayed payment of retirement dues is no longer open for debate

The Rajbir Singh decision specifically mandates the payment of interest at GPF rates, calculated on a compound basis, for delayed retirement benefits

Therefore, despite the respondents' plea of financial distress, which was used to justify releasing benefits in installments, the Tribunal found the respondents legally bound to pay interest as per the established precedent

The interest is to be calculated from the date of the applicant's retirement until the actual payment date, at GPF rates, compounded, in accordance with the Full Bench decision of Rajbir Singh (supra)

This award is subject to the outcome of WP(C) No. 19199/2025, pending before the High Court of Delhi

The exercise of calculating and paying the interest is to be completed within eight weeks from the date of receipt of the certified copy of the order